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Tag Archives: Business

They may seem, at first glance, to have nothing in common—different industries, challenges, experiences, leaders, competition, you name it. But there is something about this group of organizations that drew attention and merited study.

12 Characteristics

How did you arrive at the common characteristics of organizations achieving excellence?

Effectively these emerged gradually through the research. We studied each institution with an open mind and on its merits. Then we shortlisted, at the conclusion of our research in each case, what we thought were the fundamental drivers of that institution’s enduring outperformance. When we compared the lists we had created across several of the institutions, the common characteristics became evident.

Secondly, because our research process was quite extended, we had the opportunity to use some of the later studies to test and validate hypotheses emerging from the earlier ones.

Finally we used some of our client work, which was progressing in parallel, to further refine our thinking.

I often ask leadership experts whether leaders are made or born. You take on that question with regard to high-performance organizations and say that they are made, not born. What leads you to this conclusion?

Simply put, the leaders who we spoke to in the organizations we researched were consistent in articulating and reinforcing that view. Without exception they talked about how they viewed the enduring sources of their advantage as being their people and their organizations, and they each described their roles as being about setting direction and ambition and then facilitating and enabling their organizations to achieve and extend those ambitions over time.

Even more particularly, given that many of the organizations we researched could be reasonably described as “values-driven,” their leaders saw a fundamental aspect of their roles as being about defining, representing, facilitating and rewarding those values in their organizations. The Mayo Clinic, Tata, Doctors Without Borders (Médicins sans Frontières) and the US Marine Corps were particularly strong examples in this regard.

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“Overengineered engagement initiatives can become impersonal and feel false.”

4 Pillars of High-Performance

There are lots of ways in which organizations go wrong when it comes to planning, but for this discussion we will highlight two that we observe again and again in our work.

First, we suggest that organizations go wrong by planning on a basis of “inside-out” rather than “outside-in.” That is to say, their leaders tend to look at last year’s model and last year’s performance and identify tweaks they can make with a view to delivering incremental performance improvements next year. This model of planning tends to be short-term and tactical in nature and anchored in a historic, likely outdated, view of the world.

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High performance organizations plan from the outside-in, not inside-out.

High performance organizations come at planning from the outside-in, using a much more strategic, future-oriented approach. They start by looking outside their organizations to understand how the context within which they operate is changing. Sometimes they do this by looking at their organizations through a series of discrete “lenses” – for example industry, market, customer, competitor, technology, regulatory, people – to understand (a) what dynamics they observe, (b) what opportunities and/or challenges arise as a result of these dynamics, and (c) how these dynamics might play out over the course of their planning horizon. Armed with these insights – in particular a much deeper understanding of cause-and-effect – they are better positioned to create strategies that bridge from where they are now to where they want to be over time. Relative to the first approach we discussed, plans developed this way tend to be more ambitious, radical and lower risk all at the same time.

Second we would suggest that organizations go wrong because they view planning as a task rather than as a capability. They view it as a chore to be endured once a year to fill a template, and which brings with it a significant cost in terms of time away from the frontline. Their engagement and investment in planning reflects this attitude – for them it’s about getting to the end of the process as quickly and painlessly as possible.

The approaches we observe in high performance organizations, by contrast, are more consistent with Eisenhower’s famous mantra that, “Plans are nothing, planning is everything.” They understand that their organizations, and the worlds in which they are operating, are always changing, and as such they develop planning as a dynamic, enduring competence. They operate “with their heads up,” tracking changes in their context all the time, taking on board the lessons of their experience and factoring insights into their plans on an ongoing basis. Some of these organizations have moved away from a traditional, annual model of budget-based planning towards a more continuous, iterative model of strategy development and deployment.

At the beginning it was called administration. That is why MBA stands for Master of Business Administration.

Over time “administration” was found to be too limiting as a concept. It was delegated to low level supervisory and bureaucratic positions, and the concept of management was born. Business Schools across the country changed their name from Graduate School of Business Administration to Graduate Schools of Management.

The concept of management was not yielding the right understanding of the process of transforming organizations, and the concept of Executive Action was born. Titles such as CEO, CIO, CMO etc. appeared like mushrooms after the rain, and executive programs emerged in the market place.

Still not good enough to explain how organizations should be transformed, the concept of leadership started dominating the literature.

What is going on here?

Administration, Management, and Leadership have a common purpose. They are theories that prescribe how organizations should be transformed and how to manage change. They are all based on the same paradigm of individualism, that a single individual is the driving force of this transformation, whether it is called Chief Administrator or Manager or CEO or Leader.

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“The achievements of an organization are the results of the combined effort of each individual.” –Vince Lombardi

As long as we remain with the same paradigm, no concept will be satisfactory. We will continue to change titles, embellish concepts and continue to chase our own tails, reinventing the same wheel from administration to leadership. Leadership will be assigned its place in the annals of social sciences next to management and administration.

Change the Paradigm

Whether you’re in a large business or you’re an entrepreneur, you’ve seen that how products and services are marketed has changed dramatically in the past several years. Our social, mobile, always-on, data-driven, analytical, highly-personalized world is changing at a pace never seen before.

How your message reaches the world is changing as fast as the technology changes. And the role of marketing has shifted, requiring marketers and business leaders not only to understand traditional marketing but also to mine data to make decisions.

Adele Sweetwood has just released a new book, The Analytical Marketer: How to Transform Your Marketing Organization. As Senior Vice President of Global Marketing and Shared Services for SAS, she guides marketing strategy and go-to-market programs. Her research and 30 years of marketing leadership make her the perfect executive to explain the shift in messaging and what to do about it. I recently asked her about the changing nature of marketing and analytics.

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“If you don’t like change, you’ll like irrelevance even less.” –Eric Shinseki

Deliver A Great Customer Experience or Risk Extinction

Data analytics is all the rage in helping executives make decisions. How is it transforming traditional marketing?

Being a customer-centric business was once the exception, not the rule. Now businesses across all industries need to deliver a great customer experience or risk extinction. Marketing can lead this transition by defining what a meaningful interaction looks like for that business’s consumer. The best marketers today have a keen sense of, and clear focus on, the demands of the customer, through sophisticated analytics and data-driven methodologies. In our digital “always on” world, where we’re continually collecting copious amounts of real-time data about our customers, marketing is in the best position to own and leverage that data to understand and service the customer in ways that weren’t possible before.

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“It is a capital mistake to theorize before one has data.” –Arthur Conan Doyle

Develop Multiple Skills for Success

Since we learn that a numbers-orientation is left brain whereas creativity is right brain, is it really feasible to be equally skilled at both?

I don’t believe anyone is exclusively left-brained or right-brained. Being more analytically-oriented or more creative can certainly be innate in someone, but with training, new skills can be learned and developed. Marketers have traditionally worn many hats, so flexibility has been a long-standing component of the job. While a member of my team may not need to tap into her entire skillset every day, she absolutely needs a wide variety of skills that include analytics, social media, storytelling, and creativity to be successful.

The reactive approach to marketing simply doesn’t fit into a customer-centered business culture. Marketing now is more about science or math that is driven by an influx of data, channels, mobility, and, most importantly, changing customer demands. Analytics is driving campaigns. As a marketing department, that means leaning more on the work of folks who help analyze behavioral data and the digital footprint of our customers and prospects.

In fact, some of the most interesting work within our marketing department at SAS comes from those focused on data forensics. This is the practice of using data discovery to establish the facts of a marketing activity, a campaign, or a broader initiative. But beyond the basics of data digging, data forensics incorporates intangibles. They are the piecing together of anecdotal and qualitative tidbits along with quantitative data to develop a rich picture of what is working and what isn’t. With that data and analysis, we’re creating campaigns that are more focused on where customers are in their decision journey and what they are looking for. We’re not blasting an email campaign and waiting for results – we’re a step ahead.

Today, many marketing leaders report that they are having less impact and are not satisfied in their jobs. That may be somewhat surprising since marketing methods and capabilities are in the midst of exciting changes and the opportunities are like never before.

Thomas Barta, a former McKinsey Partner, and Patrick Barwise, Emeritus Professor of Management and Marketing at London Business School, just conducted the most extensive research ever onwhat drives marketers’ business impact and career success. What drives impact? What does it take to thrive in marketing today? With data spanning 170 countries and over 8,600 leaders, Thomas and Paddy distilled the results into what it really takes to drive customer and company value.

Your research revealed that most senior marketers aren’t satisfied with their career paths. Why not? What’s different for them than they expected?

That’s right. Only 44% of marketers are satisfied with their careers—and in the 360-degree data, marketers’ bosses, when comparing the career success of all their direct reports, put them last. We think there are two reasons. First, as customer experts, they likely think they should have more influence on key business decisions rather than being limited to decisions on advertising and promotion. Recent research by Frank Germann, Peter Ebbs and Rajdeep Grewal shows that they’re right: having a CMO in the C-suite and having an influential marketing department do help companies become more customer-focused, increasing business performance. Secondly, they lack job security. While average S&P 500 CEO tenure is six years plus, average US CMO tenure is only four years and possibly decreasing: search firm Spencer Stuart recently reported it was down to forty-four months in 2015.

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“Leaders must encourage their organizations to dance to forms of music yet to be heard.” -Warren Bennis

Balance Leadership and Functional Skills

You say that leadership skills matter more than technical marketing skills. I passionately agree. Is there a certain time when this matters more in a career? How do marketers balance the constant need to stay up with new technologies with the need to learn leadership skills?

Leading marketing isn’t the same as doing marketing, and many marketers underinvest in leadership skills.

As a junior marketer, most of your effort will inevitably go into becoming excellent in the particular technical area you’re working on. As you become more senior, you have to achieve more through other people. But at all stages, it’s important to keep developing your broader business and leadership skills.

Our evidence is that many, perhaps most, senior marketers are getting so sucked into the ever-changing technical issues that they lose sight of the bigger picture and the need to build and mobilize a great team, keep it aligned around the CEO’s agenda, spend time with their non-marketing colleagues who mainly determine the quality of the customer experience, and so on.

Patrick Barwise

As a senior marketer, you should aim to be a leader of leaders. You need enough understanding of the latest technical developments to hire the best people, mobilize them, align them with the strategy, and constructively challenge them when necessary. But your main role isn’t to try to keep fully up to speed on the technicalities (an impossible task); it’s to ensure that, as a group, the team contributes as much as possible to the development and execution of the strategy. Crucially, that includes mobilizing your boss and your non-marketing colleagues as well as your team (and yourself).

Functional skills and leadership skills matter. Getting the balance right is a big challenge, but really important for both marketing and the company.

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“Recognizing power in another does not diminish your own.” -Joss Whedon

Take a 360 Degree View of Leadership

You distill your findings into 12 traits that drive success, and you put them in 4 categories (boss, colleagues, team, yourself). That’s basically an internal 360 degree view from where you sit in an organization. What are some of the symptoms that demonstrate you have it wrong, e.g., you’re focusing too much on the boss and not enough on the team or otherwise have your balance out of whack?

That’s exactly right about the 360 degree view. Our beef with most work on leadership is that it’s only about managing your subordinates and perhaps yourself. But most leaders – in fact, everyone up to CXO level – also need to manage their relationships with their colleagues and bosses. The traditional picture of leadership is incomplete except for perhaps the CEO – and even the CEO is accountable to the chairman and the board.

The main way in which senior marketers get this balance wrong is by spending most of their time inside the marketing department managing the team’s activities rather than walking the halls to energize everyone around the customer agenda. The symptoms are that non-marketers in these companies will likely say: “Marketing is a silo,” while the marketers will refer to themselves as something like “the coloring-in department” – that is, limited to advertising and promotion, with little influence on the company’s products, prices, distribution, service support, etc.

The 12 Powers of a Marketing Leader

Tackle only big issues

Deliver returns, no matter what

Work only with the best

Hit the head and the heart

Walk the halls

You go first

Get the mix right

Cover them in trust

Let the outcomes speak

Fall in love with your world

Know how you inspire

Aim higher

Cover Them With Trust

To build trust within the team, leaders need to go beyond professionalism (knowing a lot, being reliable, and so on) and our key recommendation to get people to “ask for forgiveness, not permission.” People like strong leaders who trust them and genuinely listen to their ideas and concerns, but they also want to know the real person behind the business leader. That’s why, at times, it’s critical to be willing to show weakness, too. Michelle Peluso, former CEO of online shopping site Gilt, for example, shared her own 360-degree assessments with her team and asked for help. You can’t put a value on that. Conversely, having and showing a big ego destroys trust. So make your corner office the team room. Praise people. Take one for the team at times.

The 4 Most Important Powers

After enlisting in the Marines Ken Marlin worked his way up to become a captain and infantry commander. After the Marines, Ken has led a technology company and finally an investment bank on Wall Street.

Be Ready to Walk

Be prepared to walk away from the table. This is a great place to start. Do you have an example of when someone wasn’t willing to walk away and how that hurt them?

I have many examples both positive and negative. That’s because negotiating is much more about psychology than logic – and it has very little to do with finance. The negative examples aren’t fun to talk about. But we have had clients who simply weren’t willing to walk away from a prospective deal. Inevitably the other side took advantage. One that comes to mind resulted in a sale that I strongly advised against. Our client was a seller. The price offered seemed quite strong, on the surface. It was significantly higher in total value than those we received from other bidders – but a significant portion of the price was to be paid over three years based on the company’s future earnings. We’ve worked with so-called “earn-out” structures before and often they are fine. But, in this particular case, I believed that the upfront portion of the purchase price was much too low and the protections for my client post-deal were too weak. We pushed back of course, but the buyer touted the total value of the potential deal and was unwilling to move. I advised my client to walk away and negotiate with one of the other bidders – leaving the door open for the first one to get more reasonable. But my client was also focused on the total theoretical value and – perhaps – a bit too sure of himself and his own abilities. He was not willing to negotiate hard – and take the risk of losing this deal. He took the deal. The results were predictable. Within a year the senior management of my client’s company were out – and the sellers never received most of the earn-out. There were lawsuits. But the lawyers are about the only ones who came out ahead.

There must be less depressing examples of the where the approach did work.

Sure, there are lots. For example, a few years ago, we had a VC-controlled client that had been negotiating the sale of their company for months with a very qualified buyer before they came to us for help. The offer was all-cash at a fair price by any measure. At the same time, it was clear that the buyer would merge the organizations and fire at least half of my client’s personnel. The VCs were mostly interested in the money, but they were sympathetic to the CEO’s desire to protect his people. The CEO had tried to negotiate, but the buyer said that their offer was “best and final” and would expire in 3 weeks. Further, the buyer said that if there were any solicitation of other bidders, they would walk from the table. The buyer was using their leverage better than my client. They assumed that the VCs would not risk losing a high all-cash offer.

I told my client that they could not negotiate if the other side perceived that they were unwilling to walk from the table. Otherwise we would just be begging. We knew that if we solicited other bids we might lose the first buyer, but that was a risk we had to take to improve the terms. My client agreed to take the risk. Once we had other bids coming in and the first buyer saw that they might lose the deal, they materially improved the cash portion of their offer. But they put even more emphasis on cost reductions. Fortunately, we had identified another interested bidder, and we were able to use our leverage – including the specter of sale to the original buyer – to obtain an offer for more money and protections for the employees. That was win-win.

About a year ago we had a similar experience internally, as the lease on our office space was expiring. We were the sole occupant of the top floor of a prestigious New York office tower. It had terraces, great light and views, and it was all built to our specifications. We were willing to stay. But the landlord asked for a rent increase that was clearly above market. He may have assumed that we would not walk away. We pushed back. We showed him that rent for comparable spaces was lower. But logic did not work. He declined to offer more than a pittance. So we went out and found another great space and used the specter of staying in the original space as leverage to negotiate great terms with the new building. When the first landlord saw that we were willing to walk from the table, he finally got reasonable. But it was too late. We moved to the new space. We love it.

Tell the truth. I love this one as part of your rules. What’s the Marine definition of lying?

I’m not saying that you can’t lie to an enemy who is trying to kill you or your friends. This is about negotiating in normal business environments – or in Marine environments when you are negotiating with so-called “friendlies” (such as local villagers). In this context, the Marine definition of lying goes beyond the standard definition of asserting something as fact that you know to be otherwise. It includes making statements – or failing to make statements – as part of an express intent to deceive. It’s an extension of the concept that my word is my bond – with a focus on being honest with those who expect that of you. Reputations are built over time and will outlast the negotiations at hand. A reputation as a liar will eventually catch up to you.

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Negotiation Tip: don’t make promises that will be challenging to keep.

So in that context, how do you bluff in negotiating? Doesn’t everyone bluff?

It’s true that, in my business, many people bluff. And more than a few lie. Lying is always bad. Bluffing usually is. It is also dangerous if your bluff is called. It can cost the loss of major negotiating points – and sometimes kill the deal. That’s why I prefer the truth.

Understand Leverage

Recognize when you have leverage-and when you don’t.How do you know what the leverage each side has? How does this impact your deal making?

In the Marines, leverage comes from a combination of superior force combined with moral certainty. Moral certainty was one of the key ingredients in how Americans won the Revolution against the superior forces of the British Empire. It was key to winning World War II, and it was also key to the US losing the War in Vietnam. Sure, there are many exceptions where superior force trumped all. See the Russians in Chechnya. But 150 years later, that war isn’t completely over yet. In deal making, the best leverage comes from a combination of being on the moral high ground and being willing to walk from the table. That leverage increases the more the other side wants to get the deal done. It’s usually not hard to recognize. In the book I relay a vignette about the CEO of a very large firm that had made an offer to acquire our client’s company. After we shook hands on what appeared to be a very fair purchase price, he began to dictate deal terms – and even to change some that had previously been agreed. The CEO acted as if he had all the leverage, when actually, by his bullying tactics, he had squandered the moral high ground. He was then left with the assumption that my client was desperate to complete the deal. They weren’t that desperate. The CEO was surprised when we walked from the table.

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“If you know the enemy and know yourself, you need not fear the result of a hundred battles.” –Sun Tzu

Remember the Peace

Remember the peace. Most non-military experts will pause on this one. What does it mean and why is it so important?

Most statesman learned long ago that after most wars end, there is wisdom in finding a way for the formerly warring parties to live with each other. After the Civil War came what was supposed to be reconstruction. After WWII came the Marshall plan. When people forget that basic rule of remembering the peace, it can be bad. That’s what the allies did after World War I, forcing impossible reparations on the Germans. The result was resentment that fermented and eventually boiled over. And then we got World War II. The consequences of scorched earth policies in business negotiations may not be quite as dire. But still, the smart move is to recognize that the completion of a transaction is usually not the end of anything. It is a phase point, after which it is better if the formerly battling parties (buyer and seller) can continue to work and live with each other in peace and harmony. Otherwise, life is long, resentment ferments, and bad things may happen.